Giant Biogene (2367 HK) Summary
Core Content
Giant Biogene (2367 HK) reported 1H26 revenue of RMB2,918 million, representing a -6.3% YoY decline and a +21.3% HoH increase. The attributable net profit (NP) for the period was RMB940 million, a -20.5% YoY decline and a +28.2% HoH increase. These results were broadly in line with expectations, with 1H26 revenue accounting for 48% of the 2026E forecast, slightly above the historical average of 47%.
The gross margin (GPM) declined by 2.2 ppts to 79.5%, attributed to product mix changes and the initial rollout of new products. The selling expense ratio increased by 9.4 ppts YoY to 43.4%, driven by brand-building investments and new product launch-related expenses. As a result, the attributable net margin fell by 5.8 ppts YoY to 32.3%.
Looking ahead, profitability is expected to improve as new products generate operating leverage and higher-margin injectables begin to contribute meaningfully to earnings.
Key Financial Highlights
| Metric |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Revenue (RMB mn) |
5,539 |
5,519 |
6,157 |
6,910 |
7,620 |
| YoY growth (%) |
57.2 |
-0.4 |
11.6 |
12.2 |
10.3 |
| Attributable NP (RMB mn) |
2,062 |
1,915 |
1,894 |
2,136 |
2,369 |
| YoY growth (%) |
42.1 |
-7.2 |
-1.1 |
12.8 |
10.9 |
| P/E (x) |
11.5 |
13.2 |
13.5 |
12.0 |
10.8 |
Main Points
- 1H26 Performance: Revenue and NP were in line with expectations, with a 48% contribution to 2026E forecast.
- Margin Decline: GPM dropped 2.2 ppts to 79.5%, and net margin fell 5.8 ppts to 32.3%, primarily due to higher selling expenses and product mix changes.
- Channel Adjustments: Revenue from KOMFYMED declined by 7.7% YoY, while COLLGENE remained flat, due to strategic reduction in influencer livestreaming and weak offline consumption.
- Self-Operated Channels: These channels showed YoY growth, indicating improved performance.
- 618 Recovery: Both KOMFYMED and COLLGENE demonstrated improved online momentum, with online GMV increasing over 25% and 30% YoY, respectively.
- New Products: The newly launched Ultra-Translucent Stick generated over RMB30 million in GMV in its first week on self-operated channels.
- Injectables as Growth Driver: Giant Biogene has obtained approvals for three Class III medical devices, with the first injectable product (753 胶原针) launched in June 2026 at a terminal price of RMB6,800. The second injectable product is expected to be commercialized by year-end.
- Investor Outlook: The company is maintained at a BUY rating, with a revised 2026E revenue growth forecast of +11.6% YoY. However, the NP forecast was lowered by 3.6% due to higher online traffic acquisition costs and continued brand investment.
- Target Price: HK$38.42, a slight decrease from the previous target of HK$38.70, implying a 19x 2026E P/E ratio.
Risks
- Intensifying Competition
- Weak Consumption Environment
- Lower-than-Expected Injectables Demand
Stock Data
| Metric |
Value (HK$) |
| Market Cap |
29,833.9 |
| Avg 3 mths t/o |
138.8 |
| 52w High/Low |
64.40/24.70 |
| Total Issued Shares |
1,061.7 |
| Price per Share |
38.42 |
Shareholding Structure
| Holder |
Ownership (%) |
| Juzi Holding Co., Ltd |
54.7 |
Share Performance
| Period |
Absolute (%) |
Relative (%) |
| 1-mth |
-3.1 |
-6.6 |
| 3-mth |
-0.1 |
0.7 |
| 6-mth |
-17.9 |
-14.0 |
Valuation Summary
- DCF Valuation (2026E): RMB16,874 million
- Terminal Value (2034E): RMB41,798 million
- WACC: 10.6%
- Terminal Growth Rate: 3.0%
Sensitivity Analysis
| Terminal Growth Rate |
DCF Value (HK$) |
| 4.0% |
47.62 |
| 3.5% |
45.35 |
| 3.0% |
43.43 |
| 2.5% |
41.78 |
| 2.0% |
40.34 |
Financial Summary
- Revenue: Expected to grow 11.6% YoY in 2026.
- Gross Profit: Expected to increase 10.7% YoY.
- Net Profit: Expected to grow -1.1% YoY in 2026.
- EPS (RMB): Expected to be 1.78 in 2026.
- Net Margin: Expected to be 30.76% in 2026.
- ROE: Expected to be 18.3% in 2026.
Valuation Metrics
| Metric |
2023A |
2024A |
2025A |
2026E |
2027E |
2028E |
| P/E |
16.2 |
11.5 |
13.2 |
13.5 |
12.0 |
10.8 |
| P/B |
5.4 |
3.3 |
2.5 |
2.4 |
2.2 |
2.0 |
| Dividend Yield (%) |
3.7 |
5.3 |
5.1 |
4.4 |
5.0 |
5.5 |
Conclusion
Giant Biogene is expected to see revenue growth re-accelerate in 2H26E, driven by new product launches and higher-margin injectables. While 1H26 results showed some revenue and margin declines, the company is maintained at a BUY rating due to positive long-term growth prospects and improving performance in self-operated channels. The target price of HK$38.42 reflects a 19x 2026E P/E ratio, with key risks including intensifying competition and weak consumption environment.
